The agreements mark an important first step in the struggling company’s endeavor to get cash and begin reducing its debt burden

Published By: Eunice Gettys on January 11, 2017 01:07 pm EST

BTIG weighed in on Valeant Pharmaceuticals Intl Inc's (NYSE:VRX) recent asset sales. The firm wrote in a note to clients that the sale proceeds would help in cutting down debt pile, which totaled around $30 billion as of Q3FY16. BTIG analyst has maintained Neutral rating on the stock that closed down 6.84% up in Tuesday trading session at $16.40.

The beleaguered pharmaceutical company has recently announced major deals to sell its skincare and cancer business. Valeant is selling Dendreon, its cancer business, in addition to three skincare brands. The combined proceeds from the asset sales are expected to amount to $2.1 billion. These deals indicate the Canadian drug-maker’s biggest divestitures in three years and a kickoff to its debt reduction efforts.

Analyst Timothy Chiang of BTIG said, "We expect Valeant to look to sell additional non-core assets in CY17 with the goal of lowering its debt levels, which remain high.” While the asset sales announcement proved somewhat encouraging for the investors, the analyst thinks 2017 to be a transition year for Valeant. Currently, Mr. Chiang estimates 2017 revenue of ~$9.5 billion and $4.79 EPS.

According to Tuesday reports, L’Oreal is buying three of Valeant’s product lines (AcneFree, CeraVe, and AMBI) for $1.3 billion. In addition, a Chinese company, Sanpower Group, is reportedly buying Dendreon Pharmaceuticals for approximately $820 million.

Shares of Valeant soared as much as 14% in intraday trading session Tuesday, reflecting the highest gain in the past two months. VRX stock has 52-week high price of $101.40 and 52-week low price of $13. The company has a total market valuation of $5.74 billion, which has declined over 95% since last year.